Beijing has called for closed-door emergency meetings with some of its biggest tech companies after the US introduced new chip restrictions against China.

The Chinese Ministry of Industry and Information Technology convened the country’s semiconductor firms to assess damages from US chip sanctions, according to Bloomberg.

Top  executives from firms such as Dawning Information Industry and Yangtze Memory Technologies were reportedly asked to the meetings.

“These emergency meetings with leading semiconductor companies to assess the damage from the US chip restrictions suggests that the latest round of measures is beginning to hit the bone, and export workarounds are more challenging,” Josep Bori, research director at GlobalData, tells Verdict.

Bori says the Chinese Ministry of Industry and Information Technology holding the meetings is encouraging as it “suggests escalation to geopolitics and the Taiwan situation is not yet in the picture.”

“That said, it is likely the PRC will consider all scenarios to deal with this crisis,” he add

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

After a long working tech relationship between the US and China, the bans and the new emergency meetings indicate that the relationship between the two superpowers are deteriorating.

Bori says China still relies on western tech for the front-end manufacturing processes and electronic design automations and that the sanctions will pull back China’s progress by several years. It may cause a struggle to build a fully domestic supply chain.

“The unintended consequence of all these measures is that China will surely accelerate its self-sufficiency drive, which in the long term means a smaller addressable market for the Western [semiconductor] industry, even if the geopolitics waters are somewhat calmed down,” adds Bori.

The emergency meetings follow last month’s sanctions from the Biden administration. These sanctions prevent US chip firms from working in China for the next decade.

US chip firms are also not allowed to invest in China, develop leading tech in the nation or send tech overseas to the country during this period.

Chinese chip stocks have fallen to dramatic lows, as the US recently expanded tech curbs on chips.

The US government announced that US chip firms will need to apply for licences to sell advanced tech to China. Foreign companies will also need licences to use American tools to produce certain high-end chips to sell in China.

GlobalData is the parent company of Verdict and its sister publications.